Canadians are responding bravely to an unprecedented world event. Undeniably, most Canadian businesses will experience loss and damage or reduced profits directly or indirectly arising from present events. In the months and years to come, many businesses will look to their insurers for indemnification. Indeed, property insurers will soon be considering a multitude of very challenging claims that raise issues of causation, interpretation, mitigation, and valuation under commercial property and business interruption coverage forms.
The aftermath of the COVID-19 pandemic will be an incredibly sensitive period, which will require clear understanding of operative policy language and a fulsome appreciation of the duty of good faith. While the scrutiny and denial of uncovered claims is always permissible, as never before, it will be important to avoid even the merest perception that the insurer’s own interests are being preferred over the insured’s. Coverage decisions must be based on reasonable investigations and founded in the clear wording of the policy. Insurers, adjusters, and coverage counsel can’t “shoot from the hip” as we consider COVID-19 pandemic related claims. Too much is riding on how we handle this. Let’s take the time it takes to get it right.